E&O insurance Blog Posts

Let’s say you are a publicly traded company integrally involved in the residential mortgage business as a lender, wholesaler, correspondent, warehouse provider, and servicer. Let’s also say that not too long ago your company had a near death experience…as in your stock price in November of 2008 hit $00.05 per share (yes, that is 5 cents).

We are happy to report that the walls are slowly tumbling down on Llano Financing and the Ganter brothers (Chris & Ben). If we sound biased it’s only because we are. When any entity like Llano is on the losing end of close to 100% of the cases in both state and federal court, it becomes very clear quickly to both the judiciary and the general public that something fishy is going on.

In February 2014, we reported what we saw as a potential scam involving letters being sent to appraisers by a group called Savant Claims Management. Since then, a lot has happened and we want to provide an update on the latest activities by entities related to Savant and give some tips to those who have actually been sued by First Mutual Group, L.P. from Plano, Texas. (First Mutual Group, L.P., is a Delaware limited partnership whose members are Alternative Capital Strategies, LP, (a British entity) and First Mutual Group, GP LLC (another Delaware entity).

In a rare occurrence, a New Jersey Court recently enforced the State’s prohibition against frivolous litigation against a plaintiff who sought to sue a home inspector following a failed real estate transaction.

Non-lender work is growing in popularity, as appraisers have grown weary of outrageous AMC demands and competing for low-ball fees. But the grass isn’t always greener on the other side: non-lender work has its cons, and AMC work has its pros. Don’t believe us? We’ve laid out some of the pros and cons of both types of appraisal work.

Insurance: that annoying but potentially beneficial thing we pay good money for and hope to never use. Insurance can protect your car, your business, your family, your home and more. The downside? It can often put a big red target on your back that says “sue me.”

The latest and greatest technology may be a boon to your home inspection business, but it’s likely not covered by your E&O carrier. While tech advances quickly for inspectors, insurance companies have yet to catch up and therefore may not offer appropriate levels of coverage just yet.

One of the requirements of your job as an appraiser is getting to the property to appraise it. Unless you are appraising a property within a few blocks of your own house or office, chances are that you will be driving there. Today, the costs of driving -- higher gas prices, higher insurance premiums and higher maintenance costs -- have gone through the roof.

In the auto insurance business, there is a phenomenon known as the “red convertible,” in which claims for theft and accidents are much higher rate than other vehicles. A similar reality is known among real estate insurers as “the repeat claims offender”. When it comes to raising red flags, if these offenders didn’t have bad luck, they’d have no luck at all.

On May 23, 2014, the Court of Appeal for the Fourth Appellate District, Division One, State of California, issued a very interesting decision on whether a plaintiff can successfully plead and argue fraud based on comments made about the concluded value of real estate that was appraised. The case is Graham V. Bank of America, N.A., et al. Although this ruling is unquestionably useful for an appraiser being accused of appraisal fraud, it probably is not the magic elixir many will proclaim it to be.